OLD Info that was on the News & Events Page
NJFSC President Richard Klein attended a fundraiser for Newark Mayor Cory Booker, during his run for the U.S. Senate.
Richard Klein, NJFSC President, lobbied in Washington, DC for government recipients to continue to have the option to receive paper checks.
What about the link to these photos? this is from 2013?
•Eight Important Updates from NJFSC — March 5, 2013 — OTHER PLACE TO PUT THIS INFO? SOME IN MEMBERS AREA???????????
◦NJFSC General Membership Meeting Held in May
▪Scott McClain offered a BSA/AML Compliance Training Workshop. All attendees received a Certificate of Attendance
▪There was a discussion on the progress of the Small Dollar Loan Project
▪NJ Department of Banking & Insurance representatives made presentations
▪NJFSC Lobbyist and General Counsel provided updates on pending legislation and news in the industry
▪Associate NJFSC Members presented
▪New business was covered
◦NJFSC Seeks Increase on Fees for Business Checks and Checks Over $2,500
◦NJFSC Fights Move to Prepaid/Direct Deposit for State Tax Refunds
◦SS/SSI Checks to Continue for Recipients Who Refuse to “Go Direct”
◦NJFSC Member Obtains $500,00 Judgment Against Unlicensed Check Casher
◦NJFSC Examines Small Dollar Loan Feasibility
◦Be on Alert for Tax Refund Fraud
◦Smart-Phone/Remote Deposit Fraud
•September 10, 2012
•Important Advisory – Re: NJ Labor and Workforce Development Law
•Updated FiSCA Check Casher Compliance Materials
•Department of Banking Announces New Fingerprinting Process
•New Department of Banking Process for Annual Reports and Assessments
Eight Important Updates from NJFSC — March 5, 2013
I. NJFSC Held May 2013 General Membership Meeting
At this Members Only Meeting, important industry and legislative updates were provided, including presentations from representatives from the Department of Banking, presentations by vendors and others.
Scott McClain offered an Anti-Money Laundering Compliance Training Workshop. All attendees received a Certificate of Attendance.
Members can log into the Member Access for more information on the General Membership Meeting.
If you are not a member of NJFSC, become a member to attend.
2. NJFSC Seeks Increase on Fees for Business Checks and Checks Over $2,500
The NJFSC Board of Directors has approved an initiative to seek an increase in the check cashing fee to 3.0% on checks payable to businesses and checks over $2,500.
A fee increase on these checks is justified due to the fact that cashing larger checks and checks payable to businesses present a greater risk of loss and require more due diligence, regulatory compliance and recordkeeping on the part of the check casher. Additionally, check cashers should be permitted to charge more on business checks because they are not “consumer transactions” deserving of greater consumer protections. (In New York, for example, there is no fee cap on checks payable to businesses.)
Our current 2.21% rate is among the lowest in the U.S. We believe that a fee increase on business checks and checks over $2,500 will help offset bad-check losses and additional cost increases facing the industry. NJFSC is now working in Trenton to have the legislation approved.
3. NJFSC Fights Move to Prepaid/Direct Deposit for State Tax Refunds
Recently, a bill (A-3561/S-2423) was introduced which would move State tax refunds to mandatory prepaid card or direct deposit, denying our citizens the right to choose the manner in which they receive their own tax refunds. NJFSC vigorously opposes the bill and is working with our representatives in Trenton to preserve a paper check option for taxpayers.
There are many reasons to preserve paper checks for State tax refunds:
• Taxpayers should be able to choose how they receive their money.
Every year millions of New Jersey residents overpay taxes to the State. These funds are the property of the taxpayers – who must have choice in how they receive their own money.
• A similar program for Federal tax refunds was a failure.
The U.S. Treasury cancelled a pilot program that allowed taxpayers to receive their tax refunds on a debit card — because less than 1% of those eligible chose the debit card. New York and other states have rejected the approach, passing laws preserving paper checks.
• Prepaid cards can be expensive and cause problems in accessing refunds.
Prepaid cards often include hidden fees and ATM charges. Also, ATMs do not dispense small bills, creating problems for people trying to access all of their funds.
• Direct deposit is not feasible for all New Jersey taxpayers.
Due to minimum balance requirements, overdraft fees, etc., many consumers are simply unable to maintain bank accounts, and thus do not have access to direct deposit.
In sum, the bill would force taxpayers to accept fee-laden prepaid cards or bank direct deposit fees for State tax refunds. Taxpayers should not have to pay bank fees to get their tax refunds. NJFSC vigorously opposes the bill and is working to have the law changed to require a paper check option.
4. SS/SSI Checks to Continue for Recipients Who Refuse to “Go Direct”
SS/SSI beneficiaries who don’t sign up for the GoDirect program will continue to receive paper checks after the March 1, 2013 deadline.
According to a recent New York Times article, an official from the Treasury Department’s Go Direct campaign confirmed that recipients “who fail to switch will still receive paper checks” but will receive mailings encouraging them to switch to the card or direct deposit.
The official indicated that Treasury does not “have the authority to change their payment method without their permission,” but they may be mailed a Direct Express card, and urged to activate it. Those who continue to hold out for paper will continue to hear from the government, he said.
According to the Times article, about 93% of SS and SSI payments are made electronically via direct deposit or prepaid card. (Some privately issued prepaid cards can also be used to receive payments, as long as they are insured by the FDIC and meet other requirements.) About 5 million recipients – mostly unbanked customers – are still getting paper checks.
5. NJFSC Member Obtains $500,000 Judgment Against Unlicensed Check Casher
Unlicensed check cashers continue to plague our industry, and the Department of Banking has done little to tackle the problem. At the urging of NJFSC, we had the law changed to allow licensed check cashers to directly sue unlicensed operators.
Using that law, a NJFSC member recently filed a lawsuit against an unlicensed check casher, who had been operating for years in his area. The NJFSC member not only closed down the illegal operation, but also recovered a Judgment of $500,000, including $300,000 in compensatory damages and $200,000 in punitive damages.
Remember, in addition to criminal sanctions, under New Jersey law you have the right to sue illegal operators who are having an impact on the licensee. Please contact NJFSC if you require more information.
6. NJFSC Examines Small Dollar Loan Feasibility
As reported at our September Atlantic City meeting, NJFSC is examining the introduction of legislation in New Jersey that would permit licensed check cashers to offer small, short-term loans (“SDLs”) to New Jersey consumers suffering credit emergencies.
The NJFSC Board has met with an industry consultant to examine different SDL models and potential profitability. Based on changing demographics and the economy, there is a growing need for affordable, short-term credit products in New Jersey.
A similar legislative initiative is underway in New York. The New York industry has made significant gains in getting a small loan product introduced. Approximately 38 other States and Canada currently allow some form of small lending. Passage of a SDL law in New Jersey would be a huge boost to our industry.
7. Be on the Alert for Tax Refund Fraud
As previously reported, criminals are stealing identities and Social Security numbers and using the information to file falsified U.S. tax returns and intercept the tax refund checks.
Criminals may try to cash the checks using false ID at a check casher, or may bribe an employee to cash a large number of checks. Once the fraud is detected, the check casher’s account may be debited for the full amount of the fraudulent checks cashed. If detected by the check casher’s bank, the bank may close the account without warning. Be aware of the following red-flags that may indicate tax refund fraud:
•Checks where the payee is not from your immediate community
•Checks bearing Puerto Rico or U.S. Virgin Island Social Security numbers,
(580 – 584, 596-599)
•3-part Hispanic names: e.g., “Maria Lourdes Hernandez” “Juan Pineda Garcia” (Many of the fraudulent checks we have seen had 3-part names.)
•Persons trying to cash tax refund checks in bulk
•Someone other than the named payee is cashing the check
•Person presenting the check does not have valid ID, or ID is questionable
•Notify law enforcement and file a Suspicious Activity Report (SAR) if you suspect Tax Refund Fraud.
8. Be Aware of Smart-Phone/Remote Deposit Fraud
This is a new type of fraud enabled by smart-phone “apps” that allow bank customers to remotely deposit checks via mobile phone. After depositing a check by smart-phone, some scammers are then taking the original check to a check casher and cashing it. Because there may be no markings or special endorsements on the check, it is impossible for the check casher to tell that the instrument has already been deposited.
If you have been the victim of this type of fraud, you obviously can seek repayment from the payee – if they can be located. You may also have the ability to enforce the check under the warranty provisions of the Check 21 Act (12 USC § 5004). Under the law the bank that first deposits the substitute check is subject to a warranty that no other depository or “endorser” will receive presentment of the original check or another substitute check. This law may entitle the check casher to repayment from the depositing bank.
If you are the victim of this type of fraud you should submit a notice of claim within 30 days to the rejecting bank demanding repayment. Your own bank may help you identify the rejecting bank.
Under the Check 21 Act, unless a check casher or other person sends a written notice of claim within 30 days after he/she has reason to know of the claim and the identity of the bank rejecting payment, the claim may be barred. You then have only one (1) year from the date of the transaction to file a lawsuit.
Note: if you fail to send a written notice of claim within 30 days, or fail to file legal action within the one year period, your claim may be barred.
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If you should have any questions or require more information, please contact NJFSC General Counsel Scott McClain at Winne Banta – (201) 487-3800 or contact NJFSC’s main offices.
Important Member Advisory
It has come to our attention that that some businesses in New Jersey may be demanding that employees receive their wages by direct deposit or payroll card only (i.e., without an option to receive wages by check). This would be a violation of New Jersey law.
New FiSCA Check Casher Compliance Materials
Federal law requires that all check cashers have specialized compliance policies and procedures. FiSCA has developed new FiSCA Model Compliance materials that are free to all NJFSC members.
Join NJFSC for Updates and Access to the updated FiSCA Check Casher Compliance Materials!
New Department of Banking Process for Annual Reports and Assessments
The New Jersey Legislature recently passed a “special assessments” law that changes the way the Department of Banking will be funded. The new law will allow the Department to issue assessments to all financial institutions licensed in New Jersey to pay for the Department’s costs in regulating the industry.
All financial institutions, including banks, credit unions, money transmitters and pawnbrokers, will be subject to the assessments formula.
Q. What affect will the special assessments law have on licensed check cashers?
A. Instead of paying a bi-annual licensing fee, plus fees for Departmental examinations, check cashers will pay only one annual assessment. Assessments will be calculated by a Base Fee plus a formula based on the dollar volume of checks cashed per licensee as reported in your annual reports.
Q. What if a Licensee Objects to the Amount of the Assessment?
A. The new law includes a right of appeal if the licensee disagrees with the way an assessment was calculated. Your assessment must be paid pending a decision on your appeal.
Beware! You may be subject to$50 per day penalties if your assessment is paid late, or if the financial data you report to the Department is incorrect.
Q. When will the special assessments law take effect?
A. No assessments will be issued to licensees until September 2007.
Q. What is the filing deadline for annual reports?
A. All annual reports must be filed by April 1, 2007, for the preceding period of
January 1, 2006 to December 31, 2006.
Q. What about electronic filing of reports?
A. All check casher annual reports are expected to be filed electronically via Internet with the Department of Banking through the State’s secure website. It is expected that annual report forms will be available online through the Department of Banking in December 2006. Instructions about filing will be available at that time. For more info check the Department’s website.
Note! If you do not have the ability to file electronically, you must file a “hard copy request form” postmarked no later than January 15, 2007. Please check the Department’s website for more information on obtaining forms and filing hard copy annual reports. Hard copy reports are due no later than March 1, 2007.
Department of Banking Announces New Fingerprinting Process
Information and forms for fingerprinting new licensees and employees is now available
on the Department of Banking and Insurance website
( www.state.nj.us/dobi )
Click for more information and links for the Live Scan: Electronic Fingerprinting Process.